A report from the regeneration think tank Future of London highlights nicely some of the more vividly dingbat consequences for the capital of government housing grant and benefit reforms. Assessing the early progress of the "affordable rent" model, that weaselishly clever way of calling a massive spending cut a thrilling form of flexibility, the report identifies a dazzling array of looming false economies, fading promises and frankly madcap results, including adding to the housing benefit bill. Stick with me - there's so much to enjoy.

"Affordable rent" presents itself as a way to maintain a supply of homes to let for less than London's loony private sector rates while cutting back on public spending at the same time. Boris Johnson, who distributes London's portion of the greatly diminished housing grant cake to housing associations, has accommodated the new (pardon me) "product" in his revised housing strategy and his London Plan. He has declared his concern that there should be "no segregation of London's population by housing tenure," that 36% of new homes built under his overall affordable housing programme should have three or more bedrooms, and that "affordable rent" levels should be set as close as possible to the permitted limit of 80% of market rents.

What has been happening so far? The report finds that, as intended, the first bunch of "affordable rent" homes have been mostly allocated to people who would otherwise have been seeking or inhabiting traditional social housing (they've been slightly less well off on average). This largely explains why the new tenure homes have been "focussed on Outer London and the cheaper eastern boroughs" - their rents, linked to local market rates, would have been unfeasibly high in the centre of town.

This problem of "affordable rent" homes being, in fact, unaffordable is seen by providers as bound to be exacerbated by the forthcoming total benefit cap, which will place them beyond the reach of non-working households in expensive areas. Attempting to deal with this, housing associations have been reluctant to set rents at the 80% of market level Johnson desires, especially for larger homes, but the report still expects him to fall "significantly short" of of his family homes target. The report also says that "very large areas of London would be unaffordable in ARM [affordable rent model] terms," to the 16% of London households earning less than £15,000 a year unless they are receiving benefits.

These outcomes do not sit comfortably alongside the Mayor's worry about social segregation, and the report notes that the disproportionate distribution of "affordable rent" homes in poorer areas risks that very thing occurring.

There is another revealing thing going on. Existing homes that had previously been available for the much lower social rents can be converted to the new "affordable" type when a tenancy ends. It is such conversions that accounted for a large majority of the "affordable rent" homes that had appeared in London by the end of last year - no less than 2,571 out of 3,014.

A consequence of this is that the mostly low-income Londoners living in these homes are qualifying for larger quantities of housing benefit or maybe qualifying for the first time, including if they are working households. This was always the government's expectation to some extent, but it's a weird way of reducing the benefit bill. It is, however, quite a useful way of further eroding the number of homes for social rent in London - and that is something both the government and its close ally Mayor Johnson appear not to be unhappy about at all.

Read the full Future of London report here and the executive summary here.